Energy Businesses Npower and SSE in Merger Discussions
SSE and Npower, two of the UK’s “big six” energy providers, are reportedly in talks about a potential merger. The suppliers are two of the largest in the UK, and a merger could lead to Britain’s “big six” energy suppliers becoming a “big five.”
Both companies recently stated that they have been involved in discussions about merging electricity and gas supply operations in the UK. SSE, one of the companies involved in the potential merger, is currently the second largest energy supplier in the UK.
As of right now, the discussions are still very much in the hypothetical stages, with an SSE spokesperson stating that the talks are “continuing and well advanced” before stating that neither party has made a final decision.
Combined, the two companie reach more than 12 million households throughout the UK — a total of 7.8 million for SSE, and 4.8 million for npower. The two companies account for 23% of the British electricity market and approximately 19% of British gas consumption.
This means that a potential combined company would be the largest supplier of electricity in the UK, and second largest supplier of gas behind British Gas, which accounts for 33% of total gas sales in the UK.
Larger electricity and gas suppliers have faced stiff competition in recent years, with a growing number of smaller companies offering competitive deals in an effort to win over new customers that previously relied on the “big six” suppliers.
Companies such as SSE have also faced some level of scrutiny from the government over the rising cost of household bills.
As with all large mergers, the deal will likely face a great deal of attention from authorities, with an investigation into the competitive aspects of the merger very likely. The deal will also need to win over the approval of shareholders.